2017 ‘will end a decade of global monetary easing’

Next year will be the first since 2006 that there will be no big monetary policy easing across the world’s leading industrialised nations, signifying the end of the 35-year bull market in bonds, Bank of America Merrill Lynch said yesterday.
Having driven interest rates to their lowest ever levels and lifted purchases of financial assets to over $25 trillion this year, central banks are finally maxed out, BAML said in its 2017 outlook.
Any stimulus to the world economy will now come from governments, who will use fiscal policy to wage a “war on inequality”, according to BAML.
“The era of excess central bank liquidity is ending. In 2017 markets likely will not benefit from a big monetary easing for the first time since 2006,” BAML’s investment strategy team led by Michael Hartnett in New York said yesterday.

They reckon the Federal Reserve will raise US interest rates and expect the European Central Bank and Bank of Japan to row back on their negative rate policies which resulted in more than $13 trillion of government bonds boasting a negative yield this year.
“Interest rates and inflation will surprise to the upside,” they said, predicting an acceleration in nominal US growth...